All Forum Posts by: Karl Augustus

@Frank Greg We have cash on hand to do the rehab/etcetera to make it to 4 units, and enough for a down payment on financing the other 5-6 should we decide to go that direction, but I'm looking for thoughts on what other more experienced people would do in my situation, and if it would make sense build, or more sense to wait, or even never build the others and keep it at 4 units. I'm new enough to know that I don't know enough. 

Hey everyone. Interesting opportunity here. On our existing property, we have 2 running units, a 2Bd 1Ba, and a 3Bd 2 Ba, and the property has potential for additional units, and I'm faced with the dilemma of if we should rehab what is there to get to 4 units, or build 6 additional units, demo 1 and rehab 1 on the property (Zoning is already figured out) to get to 9.  The other option is to finish to 4 immediately, and wait and build the others later. 

Our current cash in the property is about 80K, and we could likely get to 4 units with 20-25K in construction. 

NET cash flow around 1350-1500/mo

Building the 6 units from our best estimates would cost somewhere in the neighborhood of 1-1.2 MM, but with interest rates where they are for financing the construction, our  our NET cash flow would be lower in the short term, but our equity and long term income would skyrocket, especially with local cap rates continuing.  

The other consideration is that building the additional units would move us from a 1-4 unit designation into a "commercial" designation, making financing more difficult/ finding a buyer if we decide to sell more difficult etc. 

Opinions? Thoughts? Experiences? 

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Nampa.

Purchase price: $471,000
Cash invested: $80,000

House hacked/ Currently a duplex, (3bd/2ba) (2Bd/1ba), splitting 3bd unit to make triplex in February 2023 (2bd1ba)(2b1ba)(Studio).
Half finished 4th unit/cottage (1bd/1ba) on the property. Zoned per City for up to 11 Units, planning to build additional units once financing becomes more attractive.

What made you interested in investing in this type of deal?

Just wanted to get into the market, House hacked our way in, renting out 3Bd Unit.

How did you find this deal and how did you negotiate it?

Family members are RE Agents and helped us find it/ Negotiate.

How did you finance this deal?

15% down, conventional loan

How did you add value to the deal?

Built out 2 bed unit from 1 bed originally. Will add more units on the same property.